Microsoft Seeks Privacy Law to Aid Cloud Computing

By Sara Forden -
Sep 23, 2010

Microsoft Corp. is urging an
overhaul of U.S. laws for electronic privacy to help new
services such as cloud computing, a technology that may double
sales in five years.

As more data are stored on remote servers and away from
personal computers, a 1986 digital law needs to be updated to
give consumers confidence their information is protected, Brad Smith, Microsoft’s general counsel, said yesterday at a Senate
Judiciary Committee hearing in Washington.

“The law needs to catch up,” Smith said after the
hearing. Cloud computing is “a critical part of the future and
quite central to all that we’re doing.”

Collecting and storing data using remote computer servers,
called cloud computing, may generate global sales of $148.8
billion by the end of 2014, up from $58.6 billion last year,
according to researcher Gartner Inc. in Stamford, Connecticut.
If consumers worry about online security, it could limit the
industry’s growth, Smith said in prepared testimony.

Microsoft sells cloud-computing software such as
HealthVault, which helps patients manage chronic health
conditions by storing data online, and Windows Azure, which lets
a company such as Domino’s Pizza Inc. manage its orders when
demand is high, Smith said. While the U.S. Constitution shields
letters and telephone calls from government seizure, data
transferred to a third party may lack such protection.

Google, Amazon.com

Representatives of Google Inc. and Amazon.com Inc.
testified today at a House Judiciary Committee hearing in
support of recommendations to update the privacy law by Digital
Due Process, a coalition that also draws support from AT&T Inc.,
Intel Corp. and Internet technology companies.

“Compelled disclosure of content should require a search
warrant, just as obtaining content out of a person’s desk drawer
would,” said Paul Misener, vice president for global public
policy at Amazon.com.

The Electronic Communications Privacy Act was passed by
Congress in 1986 in an effort to give law enforcement agencies
access to information while preserving an individual’s right to
privacy.

‘Reasonably Protected’

“We recognize that enterprises and individual consumers
will only use new technologies if they have confidence that
their information will be reasonably protected,” Smith said in
his testimony yesterday.

The law provides different levels of protection for
electronic messages, he said. E-mails stored for less than 180
days have more protection than older messages. A document stored
on a PC’s hard drive has greater protection that a similar item
saved on a “cloud,” he said.

“Microsoft supports changes that will ensure that users do
not suffer a decrease in their privacy protections when they
move data from their desktop PCs to the cloud,” Smith said in
his prepared comments.

Senator Patrick Leahy, the committee’s chairman and a
Vermont Democrat, said the panel would begin work on legislation
to overhaul the law, without giving a specific time line.